MICHEL MARTIN, HOST:
I'm Michel Martin and this is TELL ME MORE from NPR News. Later in the program we will visit with five-time Tony Award winner Audra McDonald. She managed to get away from Broadway long enough to record a new album and she'll tell us more about it in just a few minutes. But first we want to talk about jobs. Not unemployment, but employment at minimum wage.
According to the Labor Department, some 1.6 million Americans earn the minimum wage which is currently set at $7.25 an hour. That includes many workers at fast food restaurants. And in recent months, some of these workers have been sufficiently disenchanted with those wages to stage brief strikes in a handful of major cities, including Washington D.C., Detroit, Chicago, and New York City.
Advocates are predicting that these strikes are going to spread across the country but at the same time, critics are arguing that this makes little sense at a time when millions remain unemployed and the economy is still struggling. We wanted to hear both of these arguments so we called Tsedeye Gebreselassie. She is an attorney with the National Employment Law Project.
Also with us Mark Calabria. He is director of financial regulation studies at the Cato Institute. That's a Libertarian think tank in Washington D.C. Welcome to you both. Thank you both so much for joining us.
MARK CALABRIA: A pleasure to be here.
TSEDEYE GEBRESELASSIE: Thanks so much for having me.
MARTIN: So Tsedeye, let me start with you. Do you see this as a nationwide movement or do you see these as isolated instances in specific places in response to specific conditions?
GEBRESELASSIE: No. I see it a nationwide movement. I mean we've seen six of these strikes in as many weeks and they don't show any signs of stopping. And I think they are, you know, pointing us towards a couple things. One is that workers are fed up. If you look at an industry like fast food where a lot of these strikes have been taking place, the corporations that they work for have enjoyed record profits over these last few years.
McDonald's, for example, raked in $5.5 billion in profits but these profits aren't trickling down to the workers. You know, at $7.25 an hour which is the minimum wage, that's barely $15,000 a year for a fulltime worker, assuming that you can even get fulltime hours.
MARTIN: When you talk about jobs at fast food restaurants, I think that a lot of people would believe that these are teenagers.
MARTIN: Or young people who are not...
MARTIN: ...supporting families. What do you know about what percentage of the people - what are the circumstances of the people who tend to be earning minimum wage?
GEBRESELASSIE: Yeah. You know, it's actually a misconception. You know, the median age for a fast worker, specifically, according to the Bureau of Labor Statistics, is 28 years old. And more broadly, just across the low wage workforce, 88 percent of workers who make less than $10 an hour are over the age of 20. So increasingly in our economy they are the jobs that adults - more and more Americans - are spending their careers in.
And one reason why this is the case is because while we lost, you know, many good paying jobs during the Recession, the jobs that have come back have been disproportionately low wage jobs in the service sector. You know, jobs that can't be off-shored. Six of the 10 fastest growing occupations over the next decade will be low wage jobs like fast food, retail, food prep, child care, home health care.
MARTIN: Mark, what's your perspective?
CALABRIA: I think it's too early to say whether this is a trend. I mean, certainly as somebody who's first job - my first job was in a Burger King when I was 15, so I certainly understand the working conditions in that environment. I think a lot of workers are certainly going to be frustrated with that. I worry that in the current environment of very high unemployment - particularly for teenagers - keep in mind that the one out of four teenagers is unemployed.
And this is significantly above the rate for the overall population. And again, these are teenagers that are looking for work. These are not the discouraged teenagers that are staying at home. That trying to push up wages in an environment which you have a lot of people unemployed I think is a mistake. That...
MARTIN: Let's - well...
MARTIN: Tsedeye, what about that? How does one make the argument that wages need to be higher when there are many people who presumably would do the work now for the wages that are currently being offered?
GEBRESELASSIE: You know, the minimum wage at $7.25 is so far below what its historic value would be had it simply kept pace with inflation over these last 40 years. In 1968 the minimum wage was $1.60. If you translate that to today's dollars that's $10.70. So in large part all we're talking about is just bringing up the minimum wage to what it used to be.
And then beyond that, recognizing that we are in an economy now where more and more Americans are going to be working these very low wage service sector jobs and they are often working for corporations that are enjoying record profits.
MARTIN: OK. Let's let Mark answer that part of the conversation.
CALABRIA: Let me, let's..
MARTIN: OK, Mark. What about her point that just — let's just say from the standpoint of social policy.
MARTIN: Let's just stipulate that these jobs are highly mechanized. They're designed to be low skilled by definition.
MARTIN: I mean that's the way they're designed. But let's just say from the standpoint of social policy it's just bad social policy to have people earning such a low wage that they feel frustrated, that they feel they can't get ahead.
CALABRIA: Let's touch a number of things.
CALABRIA: First of all, I want to agree that typically unemployment among teenagers is higher, but the gap, the difference - historically, you compare teenagers to those in their early 20s, the unemployment rate is historically about seven percentage points higher. Now it's over 10 and if you graph that to the increases in federal wage, that gap continues to increase.
Now we also need to recognize that 70-plus percent of restaurants are single location entities. It's very easy to pick on McDonald's. It's very easy to pick on Burger King. But the fact is, is that the vast majority of restaurants are Ma and Pa who the average earnings are three percent of sales. McDonald's might be making record profits, but let's keep in mind when you go into the McDonald's on the corner that is a franchise.
That franchisee is paying money to McDonald's and what money he has left comes after he pays McDonald's and after he pays his employees. So he's getting squeezed in the middle here.
MARTIN: If you're just joining us, we're talking about the low wage worker strikes happening around the country. There have been a number of them. There might have been one in the city where you live. Our guests are Tsedeye Gebreselassie of the National Employment Law Project and Mark Calabria from the Cato Institute.
Tsedeye, what - are there other issues besides wages at issue here to your knowledge?
GEBRESELASSIE: I mean, I think the other thing that the workers have been saying is that they want to be able to organize an environment that's free from fear of retaliation. And I think that is something that goes along with better working conditions.
MARTIN: Are most of these workers not unionized?
GEBRESELASSIE: Most of them, to my knowledge, are not unionized. And so one of the ways that they're trying to fight for better pay and better working conditions is to say, look, we want to be able to come together without being fearful of employer retaliation and organize to better our working conditions. And, you know, they are bringing back the strike, I would say.
You know, we went through a period of decades when we had hundreds of major strikes per year in the '40s, '50s, '60s, and '70s. But over the last few years we've only had maybe a dozen major strikes per year.
MARTIN: Mark, you wanted to make a point?
CALABRIA: You asked earlier a question about social policy agenda so I want to answer that.
CALABRIA: Now, if you think that you want someone to earn a living wage and you don't think that they're going to provide the value to the employer for that, then society should step in. And again, that's why we might have things like the Earned Income tax credit. But again, part of this is saying we want to force employers to bear that social cost. And of course, if it's a social good, society should be paying.
MARTIN: Tsedeye, what about that? I mean what about that point? I mean is the issue here that the work itself just can't command a higher wage?
MARTIN: ...what is it in your view?
GEBRESELASSIE: Not at all.
GEBRESELASSIE: I mean the issue here is the restaurant industry is booming. I am sitting in New York City where there are 50,000 fast food jobs, double than there were just a decade ago. So this industry is booming and they can certainly afford to pay more. And, you know, it's not an issue of social policy. It is an issue of we have a wage floor. We set it back in 1938 during the Great Depression because - exactly for this reason.
We wanted to make sure that, especially in times of economic crisis, workers were able to earn a livable wage. The problem is that it has not kept pace with inflation. You know, until lawmakers and policy makers and corporations acknowledge that it is not good economic policy as well as social policy to pay wages that force workers to turn to public assistance to support themselves, which means that that impacts taxpayers and it is not good economic policy as well as social policy...
GEBRESELASSIE: ...to have a recovery that is built on these poverty wage...
MARTIN: Well, let me ask you this, though.
GEBRESELASSIE: ...shoulders because it's not a sustainable recovery.
MARTIN: Tsedeye, why not focus on increasing the minimum wage, then?
GEBRESELASSIE: This is a problem that requires several solutions. I think one, first and foremost, yes, of course, is increasing the minimum wage both on the federal level and on the state level, bringing it back to at least its - what its historic value would be.
But then beyond that, you know, workers have every right to go out there and say you know what, I deserve more than the minimum wage. I deserve - and in this case they're saying $15 an hour.
MARTIN: But deserve implies - who decides what a particular job deserves? How is that...?
GEBRESELASSIE: We have a labor law system in this country where workers can come together and organize and fight for higher wages. And in New York City, you've actually seen it with janitors and security guards that have actually organized and have starting wages in the low 20s, which is about, you know, what it really takes to survive in a place like New York City.
MARTIN: But is your argument that wages should be set, based on the cost of living, as decided by whoever, as opposed to what the skills that required to actually do the job? I mean, is that your argument?
GEBRESELASSIE: Well, my argument is that there is a wage floor that was set in 1938, the federal minimum wage, that needs to be updated because it is way - yeah, it has not kept pace with the cost of living. And then beyond that, workers have every right to come together and organize for better working conditions and higher pay.
MARTIN: OK, Mark, Mark? I think...
CALABRIA: I certainly agree that workers should be able to organize, just as I agree that I, as a worker, should have the right to work for below minimum wage, just like someone has the right to work for - as in a free internship. I don't have a problem with organization. I don't have a problem with people demanding that they paid a better wage.
What I have a problem is, is you using the force of the force of the government to force someone to rewrite a contract that you've agreed to. So for me, if I'm a small business employer, and you've come into me, you shook my hand, looked me in the eye and said I will do this job for X, and then you come back the next day and complain about it, why would I ever want to work with you again? You're a liar. I would not want somebody who does not keep their word.
And if they don't want to work for that, then they shouldn't have told me that in the first place.
MARTIN: I think we have time for one more comment from each of you, and so I think Tsedeye I gave you the first word, so I'm going to give Mark the last word. So Tsedeye, I'll start with you. Where do you think this is going?
GEBRESELASSIE: I think that, you know, one of the things that has been interesting to watch is the response from workers who, you know, maybe didn't participate in the strike or are in other cities who have - you know, I've read op-eds and letters to the editor in papers across the country that - where, you know, workers have this common frustration, and they're just glad that somebody took the first step.
MARTIN: Mark, final thought from you? Where do you think this is going?
CALABRIA: I think I have to agree with that. You know, I think this is going to spread. I certainly think when we see in a recession, and it's certainly worth pointing out, that a lot of this frustration is the cost of just living goes up. I mean, we have a Federal Reserve that seems committed to driving up commodity prices, food prices, and again that makes us all stretch.
And we have housing policies that are committed to driving up rent. So all this makes a person stretch. But what I want to end with is that, you know, to me we need to be careful when we go back and try to say we should do things like the '30s because the '30s sucked. Most of the policies we did in the New Deal did not work. I want to have a world where we can come into agreement, where workers and employers can work cooperatively, consensually so that they both feel like they got a fair deal.
MARTIN: Mark Calabria is director of financial regulation studies at the Cato Institute, that's a Libertarian think-tank, which is to say they believe in a minimal impact of government in public and private life.
CALABRIA: Maximizing freedom.
MARTIN: Tsedeye Gebreselassie is a staff attorney with the National Employment Law Project. She was with us from New York; Mark was with us from Washington. Thank you both so much for speaking with us with a spirited discussion. Thank you very much.
CALABRIA: It's really been a pleasure.
GEBRESELASSIE: Thank you so much, thanks.
MARTIN: Coming up, he was one of Bahrain's most popular bloggers, pushing his government for more freedom and democracy despite jail and other harassment. But during the latest crackdown, he decided to hide and read.
ALI ABDULEMAM: I challenged myself to finish 100 books in one year, but I finished 107 books.
MARTIN: A voice from the Arab spring is just ahead on TELL ME MORE from NPR News. I'm Michel Martin. Transcript provided by NPR, Copyright NPR.